By Abigail Burke and Malena Solin
The CPA Journal
November 2024
In a recent article for The CPA Journal, Abigail Burke and Malena Solin address the U.S. Supreme Court’s landmark 2023-2024 term, which included two cases with significant implications for future litigation over executive branch agency regulations and actions.
In Loper Bright Enterprises et al. v. Raimondo, Secretary of Commerce, et al., the high court overruled the longstanding Chevron doctrine that, for 40 years, largely deferred to federal agency regulations in interpreting ambiguities in the law. Then, in Corner Post, Inc. v. Board of Governors of the Federal Reserve System, the Court held that the Administrative Procedure Act’s (APA) six-year statute of limitations begins to run when an injury is suffered, not when the challenged agency action becomes final. While neither case specifically addressed Treasury or IRS regulations, Abigail and Malena write that they both have implications for more plaintiff-friendly litigation, including in the tax space.
The reversal of the Chevron doctrine in Loper Bright, for example, is likely to have repercussions in the tax space because “Treasury Regulations are not usually based on specific delegations of authority and more often serve the role of filling gaps or clarifying ambiguities in the Internal Revenue Code,” the duo note. Meanwhile, the Corner Post decision makes clear that taxpayers can “bring challenges to established regulations so long as they sue within six years of their individual injury, leaving the door open for repeated challenges to the same regulation in different forums and for challenges to regulations that have been in effect for many years.”
Abigail and Malena note that legal challenges to IRS and Treasury regulations are more likely to be successful if they target actions in which the agency has been given no express grant of authority for rulemaking under a statute. With an increasing number of cases being brought to test the limits of the lower courts’ interpretations of both Loper Bright and Corner Post, Abigail and Malena warn, “Disuniformity in tax law could prove to be a serious problem, as different applications of the rules encourage gamesmanship, lead to unfair treatment based on geographic location, and promote uncertainty and more litigation.”
The full article can be found here.
Abigail’s practice focuses on white-collar defense and tax controversy, and she has assisted clients at all stages of the civil and criminal process, from investigation and sentencing to IRS audits and appeals.
Malena is a pre-law paralegal who graduated magna cum laude from the University of Chicago in June of 2024 with degrees in Public Policy Studies and English Language and Literature.
